Taiwan Semiconductor Manufacturing Company
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Company History
Founded 1987 in Hsinchu, Taiwan
Morris Chang spent twenty-five years at Texas Instruments before the Taiwan government approached him in 1985 with a proposal: come to Taiwan and help build a domestic semiconductor industry. Chang, then 54 years old, accepted. He had a specific idea that no one had tried at commercial scale: a semiconductor company that only manufactured chips — no design, no product sales, no competition with its own customers. The 1987 founding capital of $220 million came from three sources: the Taiwan government through ITRI held 48%, Philips Electronics contributed 27.5%, and private Taiwanese investors provided the remaining 24.5%. The government stake was not a subsidy — it was a strategic investment in domestic industrial capability, and it provided TSMC with the credibility to attract customers who might otherwise have worried about a new, unproven foundry. The pure-play foundry concept took years to validate. The first major customers were small design firms that could not afford their own fabs. The business grew slowly through the early 1990s as the fabless model proved its commercial viability. TSMC listed on the New York Stock Exchange in 1994, providing access to international capital and establishing the company as a legitimate peer to US semiconductor companies. The 28-nanometer process node, launched in 2010, was the inflection point that established TSMC's technological leadership beyond dispute. NVIDIA, Qualcomm, and Apple moved manufacturing to TSMC's 28nm process and discovered that TSMC's yields, consistency, and technical support were superior to internal fab operations at every customer that had previously manufactured its own chips. From that point, the fabless model became the industry default for new chip designers, and TSMC's capacity became the scarce resource that determined how quickly the industry could grow.
Taiwan Semiconductor Manufacturing Company is incorporated in February 1987 with $220 million in initial capital from Taiwan's government, Philips Electronics, and private investors. Morris Chang establishes the company in Hsinchu, Taiwan, and begins construction of Fab 1.
TSMC completes its initial public offering on the New York Stock Exchange as an American Depositary Receipt (ADR) under ticker TSM, simultaneously listing on the Taiwan Stock Exchange. The listings give TSMC access to global capital markets and international investor visibility.
TSMC secures foundry agreements with NVIDIA, founded in 1993, for its first discrete graphics products. The relationship establishes TSMC's position as the preferred manufacturer for U.S. Fabless graphics chip companies and marks a turning point in the validation of the foundry model.
Riding the dot-com boom and the explosion of fabless semiconductor companies, TSMC's annual revenue exceeds $5 billion for the first time. The company begins construction of multiple 200mm and 300mm wafer fabs in Taiwan to meet surging demand.
TSMC introduces its 28-nanometer process node, a technology generation that proves long-lived due to its balance of performance, power efficiency, and cost. The 28nm node becomes the most widely deployed advanced logic process in history and anchors TSMC's revenue for nearly a decade.
TSMC introduces its 16-nanometer FinFET process, the first 3D transistor architecture deployed in high volume at an external foundry. Apple's A9 chip for the iPhone 6s is among the first major products manufactured at this node, cementing the Apple-TSMC relationship.
Morris Chang steps down as Chairman at age 87 after more than 30 years leading TSMC. Mark Liu assumes the Chairman role and C.C. Wei becomes CEO. The transition is smooth, reflecting years of succession planning and the institutional strength Chang built.
TSMC begins high-volume production at its 5-nanometer node, manufacturing Apple's A14 Bionic chip for the iPhone 12. Simultaneously, the company announces plans to build a $12 billion advanced semiconductor fab in Phoenix, Arizona, a direct response to U.S. Government concerns about supply chain concentration.
TSMC enters volume production at its 3-nanometer node, the first foundry to do so globally, initially for Apple's A17 Pro chip. The 3nm process represents a fundamental transistor architecture change and delivers approximately 15 percent performance improvement and 35 percent power reduction versus 5nm.
TSMC reported full-year 2024 net revenue translated in its Form 20-F as $88.268 billion, as AI and HPC demand accelerated and Arizona Fab 1 began limited production at 4nm.
TSMC's first Japanese fab in Kumamoto begins production, manufacturing chips on 28nm to 12nm processes for automotive and consumer electronics customers. The facility, a joint venture with Sony Semiconductor Solutions and Denso, received approximately $3.5 billion in Japanese government subsidies.
TSMC begins volume manufacturing at its N2 (2-nanometer) process node, the most advanced chip manufacturing process in the world. Early customers include Apple for its A19 processor family and several major AI chip designers. The node uses a Gate-All-Around transistor architecture for the first time in TSMC's process roadmap.
TSMC established WaferTech in Camas, Washington state as the first TSMC-controlled semiconductor manufacturing facility in the United States. The facility was designed to serve U.S. Customers requiring domestic manufacturing for defense and government applications. The investment also gave TSMC operational experience in U.S. Manufacturing environments, labor markets, and regulatory frameworks decades before the Arizona expansion program.
TSMC acquired a significant stake in Global Unichip Corporation, a fabless ASIC design company, to strengthen its design service capabilities and offer customers integrated design-and-manufacture solutions for complex application-specific integrated circuits. The investment reflected TSMC's recognition that some customers, particularly in networking and communications, needed more than manufacturing services — they needed design support to translate their system concepts into manufacturable chip designs.
TSMC built a controlling interest in Xintec, a wafer-level packaging and testing company that provided specialized backend semiconductor manufacturing services. The investment was part of TSMC's strategy to offer a more complete suite of semiconductor manufacturing services, extending its value chain beyond wafer fabrication into packaging and testing. Xintec's wafer-level chip scale packaging technology was increasingly important for compact electronic devices including mobile phones.
Since its establishment in 1987, Taiwan Semiconductor Manufacturing Company expanded from an early-stage venture into a recognized leader in Semiconductor foundry and advanced chip manufacturing, overcoming key market challenges.
Over its history, Taiwan Semiconductor Manufacturing Company executed decisive strategic pivots toward scalable monetization and digital distribution, securing its current market leadership.
By continually modernizing operations and embracing workflow automation, Taiwan Semiconductor Manufacturing Company maintains resilience through changing technological and economic cycles.